Overview of shoe franchises in Russia

Out of more than a thousand shoe franchising projects in Russia, there are just over twenty, and in general their conditions are much stricter than those of franchisors in the clothing or accessories segment. Ekaterina Panova, development director of the consulting company StartUp, tells about what these conditions are for various shoe brands.

The retail segment of clothes, shoes and accessories today occupies a large part (48%) of the franchise market. Over the past five years, it has been constantly growing, which attracts representatives of foreign brands: a saturated European fashion market gives an annual increase in turnover in 1-2%, while the Russian one brings about 6-7%. The shoe retail is very competitive and difficult to launch new projects, and, quite logically, it is considered as saturated as possible in terms of product content in various price segments. At the same time, it is very attractive because it has stable demand and a quite stable offer, and its franchised model is one of the most interesting, since large network retailers are increasingly expanding their influence in the regions against the background of gradually disappearing individual shoe stores. And in general, it is not surprising that for the entry into the retail shoe market, even the most experienced entrepreneurs choose not to create their own brand, but to buy a franchise of a famous brand.

Matter of choice

Today, there are more than 1000 franchise projects operating on the Russian market, but it is unlikely that at least half of the truly well-developed ones will be typed. It is extremely difficult to navigate in all this diversity and to choose a truly successful and financially profitable offer, so you need to clearly understand what you should pay attention to when choosing a franchise and how to correctly evaluate the conditions of a particular franchise concept.

Firstly, when choosing a franchise partner, do not rush to find out the financial conditions for buying a franchise. First you need to evaluate your own resources and capabilities. The franchisor who is actively developing in the regions will be primarily interested in million-plus cities, then second-tier cities with a population of 500 000 people. Some franchisors do not even plan to enter cities with a smaller number of people and will not consider candidates from there, since in such cities there may not be shopping centers that provide the necessary patency of the store.

The next task when choosing a franchise is to give the most objective assessment of potential consumers of goods in this segment of retail and determine if there is a market need to open an appropriate enterprise. If the assessment of these indicators is positive, then it is worth assessing the quantity and quality of free retail space in the city as well as its financial capabilities, especially investment in launching and maintaining the project at the initial stage. Only after determining the potential of the city and assessing their own capabilities can you begin to get acquainted with the franchisors and their proposals.

Our strict franchisors

When choosing a shoe franchise, potential franchisees should not make demands on it that are acceptable in the merchandise franchising segment as a whole. After all, shoe retail is built according to its own rules, different from those used by franchisors in retail. For example, shoe companies operating under the franchising scheme include in their offer a lump-sum payment, which is usually not charged by representatives of the clothing market and other brands from the product franchise category. The fact is that the supply of their goods already gives the company enough opportunities to earn money, and against the background of other players in this category, franchisors who charge a lump-sum fee look less attractive, which does not affect the dynamics of their development in the best way. However, unlike their colleagues, shoe franchisors not only charge a lump-sum fee, but also resort to this practice most often after the brand becomes known and in demand on the market (whereas in the clothing segment, with the brand becoming more famous, franchise conditions, on the contrary, soften). This behavior strategy of shoe franchisors, which is unusual for the generally accepted practice of commodity franchising, is determined by the characteristics of the shoe market. Despite a relatively small number of players, it is considered saturated, and the franchise market is even oversaturated, so large franchised shoe retailers can afford to dictate the rules of the game.

It is difficult to call loyal and other conditions for launching a shoe store for franchising, especially when compared with the conditions of other franchises in the product category. Franchisors in the shoe trade segment are in no hurry to give their partners additional benefits: royalties and marketing fees are provided in almost every concept of franchised stores, the costs of registering contractual relations are borne by the franchisee, and, as noted above, a lump-sum payment is made from the partner, although in the fashion segment, brand owners have long learned to earn only on production and supply. High requirements of shoe makers are related to the fact that, despite the dynamically growing demand for shoes from end users, the demand for the purchase of a shoe franchise will never be as massive as the demand for the purchase of a clothing franchise. In the fashion segment of the franchise market, shoe retail will always take third place after the sale of clothing and accessories. And this is quite logical: budget franchises remain the most demanded, and these include organization of corners, island counters and full-fledged boutiques for selling accessories and jewelry. Such stores open in small areas, and the amount of investment required for them is an order of magnitude less than in retail in other sectors of the market. However, some shoe franchisors try to adopt the very best from budget franchises accessories and introduce unique formats that allow the franchise to be classified as inexpensive, and the franchisor to work effectively with regions even in small areas.

To your liking or afford

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Currently, a little more than twenty companies are operating in the domestic business field, offering franchises for their shoe brands. They can be classified in terms of the amount of investment necessary to launch: budget proposals, franchises with an average level of necessary investments and expensive proposals.

The first group of franchisors with relatively budget offers include Crocs (from 10 thousand $), Emtoli (from 20 thousand $), Monarch (from 25 thousand $) and SOHO corner (from 25 thousand $).

Company Crocs, which is actually the most budgetary franchise in terms of total investment, offers an unusual store format for this market - an “island” with an area of ​​5-10 square meters in a shopping center. This offer may be attractive for those entrepreneurs who want to have a shoe business, but cannot afford it in terms of necessary investments. The cost of launching the Crocs “island” is $ 10 thousand, but in addition to this format, the company has a franchise of full-fledged stores in a shopping center or a separate building with a completely different level of investment.

business center also offers a budget option for opening an island point in a shopping center or multi-brand store within the SOHO corner format. Here, investments (from 25 thousand $) will be slightly higher than in the franchise offer from Crocs, since the price segment of the goods offered by TMHF GROUP belongs to the category of “premium”, and the margin within this franchise reaches 150%, which is quite rare in shoe retail.

The second group - a franchise with an average investment level - includes Thomas Munz (from $ 75 thousand), Evita (from $ 135 thousand), CORSOCOMO (from $ 115 thousand), W2 Shoes & Accessories (from $ 135 thousand) , Milana (from $ 100 thousand), Tervolina (from $ 150 thousand), Antonio Biaggi (from $ 150 thousand), CCC (from $ 100 thousand), Comforto (from $ 85 thousand), Paolo Conte ( from $ 135 thousand), Zenden (from $ 80 thousand), Obuv.com (from $ 135 thousand), Econika (from $ 100 thousand), SOHO (from $ 135 thousand).

It will be interesting to tell more about the proposals. Comforto, Obuv.com and polish store CCCwhich are multi-brand formats. Multibrand shoe stores today are clearly successful among franchise entrepreneurs, and this is especially noticeable against the backdrop of clothing retail, where a higher demand is nevertheless set for a single brand. Although five years ago, the multi-brand format was not widespread even in the shoe segment, since creating and maintaining the correct positioning of the concept of such a store is much more difficult than in a monomarket, and large areas of the store require special assortment policies and the most flexible terms for entering the network, otherwise they will seem unbearable to potential investors. In the footwear segment of the Russian market, the majority of successful network multibrands appeared relatively recently - 2-3 years ago, but they are rapidly developing and are actively entering regions with their own and franchised projects. Work in such formats is effective only over a large area, therefore, the requirements for the quadrature of the room are higher than for monobrand stores. For example, Comforto is ready to consider retail space from 120 sq.m, Obuv.com - from 200 sq.m, and the Polish multi-brand CCC agrees to conditions with a space strictly from 300 sq.m. Of course, with the increase in the area, the costs of opening a store also increase, so companies are trying to make other franchising conditions as beneficial as possible for their partners.

The third group of franchises with a high level of investment include Carlo Pazolini (from 250 thousand $), TsentrObuv (from 200 thousand $), Lisette (Rossita) (from 180 thousand $), Mascotte (from 200 thousand $) and ALBA (from 250 thousand $).

The most attractive and sought-after brand in shoe franchising for many years remains "Center Shoes". The concept of the stores of this company is adapted to any regional city, and the store itself can be located both in shopping centers and in separate buildings - only its area and traffic indicators are important. In addition, the company operates in the “medium minus” segment, which is interesting for regions with low living standards. The regional development of the CenterObuv trading house is particularly intensive today: the number of points already exceeds 1000, but the company continues to consider partnership offers from potential franchisees. Its success can be justified not only by products demanded in all regions of Russia, but also by effective management, an example of which is the fact that stores open twice a year - in autumn and spring. The possibility of launching the CenterObuv franchising point in the offseason is not possible.